01/15/2008
Financially Troubled PlanetOut Inc Considering Sale of Company
PlanetOut Inc, which owns Gay.com, PlanetOut.com and LPI Media (The Advocate, Out Magazine, HIV Plus, and Alyson Books) has retained Allen & Co. LLC to "evaluate strategic alternatives" including a possible sale of the company, PlanetOut reports.
According to financial website Seeking Alpha, "For the first nine months of 2007, PlanetOut reported a loss of $33.1 million on revenues of $39.8 million. The company last July raised $26.2 million in equity financing from a group of investors that included Special Situations Funds, Cascade Investment LLC, SF Capital Partners, PAR Investment Partners LP and Allen & Co. It sold its its travel business, RSVP, to Atlantis Events Inc. for an undisclosed sum in October, a little more than a year after acquiring it. Trading at $6.20 on Monday, PlanetOut has a market capitalization of $25.4 million. With such a cheap price and obvious appeal as a provider of information to a niche market, PlanetOut should be able to find a buyer, unless its finances scare everyone off."
Reuters reports that "The company said it will no longer provide quarterly or annual earnings outlook and will not hold quarterly earnings calls. It will report its results through its periodic filings with the Securities and Exchange Commission."
Posted 9:00 AM EST by Andy Towle in Gay Media, Magazines, News | Permalink
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It was shocking to see the fall off in advertising in the latest issue of the Advocate. Not sure why it has fallen off so sharply. Usually a lot of mainstream advertisers -- this issue, almost nothing!
Posted by: Anonymous | Jan 15, 2008 9:32:04 AM
The Advocate over the years went from a viable gay news organization to a slick piece of crap. They seemed intent on covers of primarily stars who are hawking some movie or record and slide in some comment of being "supportive" of the community. I blame the NY/LA gays who think the entire country waits with held breath at what they think is important.
They assuage their guilt every month by posting little news snippets here and there among the giant articles about self serving celebrities, outed closet cases (Lance Bass in particular), and these mega vacations reviews of places most Americans can't afford to go to while working at their two jobs.
While it's sad to see another gay news source go down in flames maybe the vacuum it creates will be filled with something more relevant to the average gay man and lesbian woman.
Posted by: GayPolitico | Jan 15, 2008 9:43:20 AM
I agree unfortunately many gay centric publications these days focus too heavily on the city living, high brand consumer end of gay life, outside of the major gay cities, we face real issues that have unfortunately not been adequately addressed as is clearly evident whilst flicking past the ads in an attempt to find a "real" story. Ultimately they need to go back to their roots.
Posted by: Naz | Jan 15, 2008 10:10:41 AM
PlanetOut was run by idiots from the start - who thought they could cash in on the internet boom. First they destroyed my favorite travel newsletter - Out and About - when they purchased it and starting taking advertising. It became a useless rag promoting the advertisers. Then they destroyed RSVP as the people they put in charge had no clue about the cruise business, the pricing model, etc. Now the Advocate is going down the tubes. The graphic redesign is ugly and hard to read. And, as noted above , the advertising has imploded. It's no wonder they are in financial trouble. Mr. Smarty pants that started the whole mess is long gone now, but his successors have been no less inept.
Posted by: alex | Jan 15, 2008 10:13:10 AM
Alex - I couldn't agree with you more. You nailed it.
Posted by: Luke | Jan 15, 2008 10:32:36 AM
The above is so correct. I worked for PlanetOut in the UK before the office was closed last year and you would not believe the waste of money. The people at the top in the US were a bunch on free-loading scoundrels who would jump on a plane at the drop of a hat (Club class, of course) and stay in the most expensive hotels in London. Bunch of wankers and hopefully they'll get their just desserts!
Posted by: Steve | Jan 15, 2008 11:06:58 AM
The above is so correct. I worked for PlanetOut in the UK before the office was closed last year and you would not believe the waste of money. The people at the top in the US were a bunch on free-loading scoundrels who would jump on a plane at the drop of a hat (Club class, of course) and stay in the most expensive hotels in London. Bunch of wankers and hopefully they'll get their just desserts!
Posted by: Steve | Jan 15, 2008 11:07:56 AM
I've always felt that there is WAY to much bloat in that company. They didn't need to buy the magazines, and PlanetOut and Gay.com should have been merged, lord knows they do the same thing.
I bet you some media conglom buys them up.
Posted by: Nick | Jan 15, 2008 12:35:18 PM
Bitter much, boys? Did you all get fired or something?
Posted by: bryan | Jan 15, 2008 12:46:00 PM
If their internal management is run as badly as their Gay.com website functions, it's not wonder. It only runs properly on one of the four web-browsers I have installed, the other three run slow and take forever to load. In Mozilla, it's over 30-mins before their chatroom's entirely loaded and running...and they wonder why I dropped my paid Premium-membership?
Posted by: Ted B. (Charging Rhino) | Jan 15, 2008 1:00:17 PM
Uh. No. Never worked for them. I'm an engineer who works for a company that creates , makes and sells real things...not a company that attempts to fabricate stock market "value" out of M&A while spending the stockholders money on luxury travel and personal perqs for the founders and executives. The fundamental problem is that Mr. Smarty Pants and his successors are posers who thought they could strike it rich like their friends in Silicon Valley, without understanding a damn thing about the businesses they were in.
Posted by: alex | Jan 15, 2008 1:00:41 PM
I subscribe to OUT and The Advocate (out of the goodness of my heart I guess). I agree, most of what they focus on are the gays in LA and NYC (who think there is no where else on earth). As far was the websites, I have never understood why the keep planeout around. I just don't understand what it's purpose is anymore. Gay.com has way too many bots!
Posted by: J | Jan 15, 2008 1:47:46 PM
Well, it doesn't help the Advocate that Towleroad has made it largely irrelevant!
The websites have been beaten by their competititors.
And Out and Out Traveler are fluff for gays with tons of money---problem is, those kinds of gays don't spend much of their time reading magazines.
I don't see the company ever recovering, without a major rethinking and restructuring. This isn't exactly the first time they've had bad financial news. I'd feel bad for them, but they brought it all on themselves. As noted, seemingly zero business acumen.
Posted by: Paul | Jan 15, 2008 1:48:38 PM
I intended to let my gay.com membership expire, because I found it totally useless as of late. But I now find I just got suckered into another year. Didn't read the fine print. I hate auto re-up web sites. Its a desperate and tacky way of doing business.
Posted by: Vi Agara | Jan 15, 2008 7:48:10 PM
There has been a slip in most magazine subscriptions due to more current online news and information. gay.com should try to concentrate on news rather than fluff. Genre is the next to go, noone cares about galking at hookers!
Posted by: Ty Jones | Jan 16, 2008 11:12:41 AM
The UK guys speaks the truth. The so-called leadership team has burned through the 8-figure cash infusion in 6 months. They hired their own shell companies to do useless consulting, spent lavishly on themselves and hired useless exec's right and left. They chased out many of the hard working people and ignore (in many cases have never even spoken to) those that remain. They have been sued and had to settle with 6 figure sums to keep people quiet. Expect more suits to follow. Many shareholders and employees have been burned in this debacle and they will not just walk away saying nothing.
Posted by: truth | Jan 19, 2008 2:34:05 PM